Positive Signs As Multiple Insiders Buy Reject Shop Stock \
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in The Reject Shop Limited's (ASX:TRS) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Reject Shop
The Last 12 Months Of Insider Transactions At Reject Shop
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Steven Fisher for AU$156k worth of shares, at about AU$4.45 per share. That means that an insider was happy to buy shares at above the current price of AU$4.45. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Reject Shop insiders were buying shares, but not selling. Their average price was about AU$3.98. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Reject Shop Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 6.7% of Reject Shop shares, worth about AU$11m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Reject Shop Insiders?
It doesn't really mean much that no insider has traded Reject Shop shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Reject Shop and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Reject Shop, you should check out this free report on analyst forecasts for the company.
But note: Reject Shop may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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